TEMPO.CO, New York - The United States has temporarily eased trade restrictions on China's Huawei to minimize disruption for its customers. The founder of the world's largest telecoms equipment maker said the move meant little because it was already prepared for U.S. action.
The U.S. Commerce Department blocked Huawei Technologies from buying U.S. goods last week, a major escalation in the trade war between the world's two top economies, saying the firm was involved in activities contrary to national security.
The two countries increased import tariffs on each other's goods over the past two weeks after U.S. President Donald Trump said China had reneged on earlier commitments made during months of negotiations.
On Monday, the Commerce Department granted Huawei a license to buy U.S. goods until Aug. 19 to maintain existing telecoms networks and provide software updates to Huawei smartphones, a move intended to give telecom operators that rely on Huawei time to make other arrangements.
Huawei is still prohibited from buying American-made hardware and software to make new products without further, hard-to-obtain licenses.
Huawei founder Ren Zhengfei on Tuesday told Chinese state media that the reprieve bore little meaning for the company as it had been making preparations for such a scenario.
"The U.S. government's actions at the moment underestimate our capabilities," Ren said in an interview with CCTV, according to a transcript published by the Chinese state broadcaster.
The temporary license suggests changes to Huawei's supply chain may have immediate, far-reaching and unintended consequences for its customers.
The Commerce Department said it will evaluate whether to extend the license period beyond 90 days.
Google Suspension
Huawei is currently on the receiving end of a U.S. government accusation that it engaged in bank fraud to obtain embargoed U.S. goods and services in Iran and move money via the international banking system. Huawei has pleaded not guilty.
The trade blacklist has added to its woes, following which Alphabet Inc's Google suspended some business with Huawei, Reuters reported on Sunday citing a person familiar with the matter, raising worries about the Chinese firm's smartphones that run on Google's Android operating system.
Monday's temporary license is likely to allow companies such as Google to continue providing service and support, including software updates or patches, to Huawei smartphones that were available to the public on or before May 16.
"Keeping phones up to date and secure is in everyone's best interests and this temporary license allows us to continue to provide software updates and security patches to existing models for the next 90 days," a Google spokesperson told CNBC in an email on Tuesday, May 21.
The license also allows Huawei to engage in the development of standards for fifth-generation (5G) telecom networks.
REUTERS
